In selecting benchmark portfolios for comparison, the client should be certain that they represent
A) the best possible portfolio construction available
B) the best but not necessarily feasible portfolio
C) alternative portfolios that could have been chosen instead of the one chosen
D) portfolios of varying degrees of risk

Question

Quizplus · Accepted Answer

Benchmark portfolios should represent alternative portfolios that could have been chosen instead of the one chosen by the client. This allows for a fair comparison of the performance of the client's portfolio against other potential investment choices. The other options (A, B, and D) do not accurately reflect the purpose of benchmark portfolios.

In Selecting Benchmark Portfolios for Comparison, the Client Should Be